I’ve tried to ignore pronouncements that we should cut tariffs on Chinese imports to fight inflation, but they’re now appearing in the Chinese press — the last straw. Not that I blame the PRC for this, they’re only parroting Americans, Americans who are being misleading, and occasionally worse than that.

For the cost of tariffs, and they do have a cost, I’ll use an annual number derived last month by an anti-tariff group, $51 billion (which naturally changes when the quantity of imports rises or falls). Fun fact: The 6.2 percent inflation rate everyone’s worried about? The China tariffs may be lowering that.

That inflation is 2021 price change from 2020. Most tariffs were applied in 2019 and passed to American consumers by mid-2020. Tariffs costs rose as trade recovered from COVID, but it’s not clear the increase was faster than consumer inflation. If tariff costs rose from $51 billion to $53 billion, say, they’d be pulling 2021 inflation down (by a tiny bit — we’ll get to that).

“Not the point!” I hear Secretaries and former Secretaries of the Treasury reply. The tariffs don’t contribute to current inflation but, if we reduced or discarded them, it could help limit future inflation. Yes, although it’s a bit odd to pick out a 2019 policy, which didn’t create meaningful 2020 inflation, in order to address 2021 inflation.

It’s odder when people don’t mention American monetary policy. In April 2020, narrow money stock M1 was $4.77 trillion. In April 2021, it was $18.9 trillion, nearly a 300 percent increase. Six months after that, we have inflation pressure — who’d have guessed? It’s the egg I had for breakfast that’s upsetting my stomach tonight, not the three large pizzas I had for lunch.

“Still not the point!” I hear some conservative friends saying. Tariffs are taxes which discourage economic activity. In the tariff case, the tax also adds to final sales prices. Both statements are true, but more distraction than main event.

We have other taxes that add to final sales prices. Federal excise taxes have the same effect as tariffs and are roughly twice as large. And the production encouraged by cutting those taxes might occur in the US, which is not true for tariffs. Yet when I tried to find anyone calling for lower excise taxes, they’re all talking about fighting inflation in India.

Time to come clean: I’m nitpicking. That’s because everything in this discussion is nitpicking (except for the 300 percent rise in M1, which is insane). Regarding the $51 billion tariff cost to consumers, US personal consumption expenditure this year will be about $16.5 trillion. Addressing consumer burden through China tariffs is equivalent to telling a family spending $500 per week on food that you’re going to cut their costs by $1.55.

That’s not a random amount; it’s how important China tariffs are. So why are people talking about them? First, the tariffs are ripe targets because they don’t do much of anything. They are applied to goods. In the first nine months of 2019, American goods imports from China were $340 billion. In the first nine months of 2021, they were $360 billion. “Trade war.”

Second, the small set of businesses affected by tariffs are arguing their case, as they should. Their voice is amplified by free traders who see tariffs as a dangerous step, even if very small, and by politicians deflecting blame for inflation. There are also people looking to gain from a brief stock market rally that could result if China tariffs are lowered. And that last group may not be the most unpleasant lobbyists.

Parts of American business are less interested in sparing consumers than in returning to “normal” US-China relations. This means no barriers to moving more supply chains to China, to investing heavily in the PRC without disclosing who’s getting the money, to selling dangerous technology. China tariffs make almost no difference to inflation and matter even less to the economy as a whole. They matter most to firms who haven’t been considering the national interest.

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